Slide 1: Products Pipelines
Products Pipelines Tom Bannigan
Slide 2: 2004 Results
2004 Results Refined Products volumes up 2.1%; Revenues up 4.9%. West Coast − Pacific volumes up 1.7% (2.6% adjusted for ethanol conversion) − CALNEV volumes up 3.7% (gasoline up 4.7%) − Strong jet volume growth on SFPP & Calnev (up 5.0 million Bbls or 6.5%) Southeast (PPL/CFPL) − Central Flor
Slide 3: 2004 Volumes
2004 Volumes EIA Nationwide Pacific Calnev CFPL PPL Demand Gasoline +1.4% +2.6%1 +4.7% +7.2% +1.5% Diesel +3.8% +0.2% -4.0% +3.7% +1.2% Jet +2.1% +5.8% +11.4% +12.3 +2.6% Total +2.1% +2.6% 1 +3.7% +7.6% +1.6%/3.0% 2 1 Adjusted for ethanol 2 3.0% represents volumes adjusted for throughput lost to ref
Slide 4: 2004 Results (continued)
2004 Results (continued) OTHER FACTORS: Gasoline volumes: Total gasoline volumes up 1.8% or 8 million Bbls. (3 million Bbls on Pacific). Adjusted for ethanol, increase year over year of 2.6%. Central Florida (Orlando) up 7.2% and CALNEV up 4.7% with strong growth in Barstow, CA. On PPL, Atlanta of
Slide 5: Demand Drivers
Demand Drivers Operate in Growth Markets* 2000-2020 Population Growth* >50% (Arizona, Nevada) >25% (California, Oregon, New Mexico, Virginia, North Carolina, Georgia, Florida) Population Shifts to Southeast and Southwest Operate in Large Markets Los Angeles, San Francisco Bay Area, Phoenix
Slide 6: Growing and Shifting U.S. Population
Growing and Shifting U.S. Population 13% 49% 48% 12% 16% 37% 40% 6
Slide 7: Demand Drivers
Demand Drivers Vehicle Sales Preferences Ratio of Passenger Cars to Light Trucks/SUV’s* 2003 2004 46%/54% 45%/55% Average vehicle fuel economy has declined to 20.7 mpg in 2003 model year from 22.1 mpg in 1988** Modest Increases to CAFE Standards for Light Trucks Through 2007 (cumulative incr
Slide 8: Commodity Demand
Commodity Demand U.S. Petroleum Products Supplied per Day 18 16 CAGR = 1.9% 14 M illion Barrels Per Day 12 Jet Fuel 10 Distillate 8 Gasoline 6 4 2 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: EIA, January 2004 Short-Term Energy Outlook. 8
Slide 9: EIA National Demand/Near Term Forecast
EIA National Demand/Near Term Forecast 2004 2005 2006 Gasoline 1.4% 1.9% 2.4% Distillate 3.8% 2.5% 1.3% Jet 2.1% 2.6% 1.9% TOTAL 2.1% 2.0% 1.9% 9
Slide 10: PIRA Petroleum Product Demand Forecast
PIRA Petroleum Product Demand Forecast 2003-2010 10
Slide 11: 2004 Results
2004 Results* Pipeline Volumes MMBBL Pipeline Revenues $MM 2004 2003 Pct 2004 2003 Pct Pacific 419.9 413.0 1.7%1 319.2 302.6 5.5% Calnev 46.3 44.7 3.8% 54.6 54.6 0.1% Plantation 227.1 223.5 1.6% 166.0 157.8 5.2% Heartland 7.5 7.4 0.9% 7.0 6.7 4.9% CFPL 37.8 35.2 7.5% 36.5 33.9 7.7% Total 738.6 723.7
Slide 12: Refined Products Terminal Revenue Growth
Refined Products Term inal Revenue Growth (Thousand $) $250,000 $224,575 $200,000 $189,166 $151,548 $150,000 $136,258 $142,739 $100,000 $50,000 $0 2001 2002 2003 2004 2005 12
Slide 13: Terminal Revenue Growth
Terminal Revenue Growth CURRENT DRIVERS: ’03 vs. ’04 revenue growth of 24.8% Ethanol blending on West Coast Shell terminal acquisitions in California/Arizona/Nevada Marine imports (domestic/foreign) into Carson, CA terminal Have increased 35% since 2000 Record imports in 2004 1 in 4 Bb
Slide 14: Terminal Revenue Growth (continued)
Terminal Revenue Growth (continued) FUTURE DRIVERS: Carson terminal expansion Import growth (finished products and blendstocks)/traders seeking storage positions Expanding customer base in Southeast/tank utilization (8 new customers in 4Q alone) Ethanol blending in Southeast (Atlanta) Lubr
Slide 15: Jurisdictional vs Non-Jurisdictional Revenue
Jurisdictional vs Non-Jurisdictional Revenue 80% 73% 73% 72% 68% 66% 70% 60% 50% 40% 34% 32% 27% 27% 28% 30% 20% 10% 0% 2001 2002 2003 2004 2005 Jurisdictional Non-Jurisdictional 15
Slide 16: Expansion Projects
Expansion Projects LA HARBOR AND CARSON TERMINAL EXPANSION Investment: $39.7 million Pipeline capacity increased by 50% to 10,000 BPH in 2004 Tank Projects delayed 1Q 2004 by City of Carson Conditional Use Permit Approval “Good Neighbor” Agreement executed 3Q/2004 Expect Permits by March 2
Slide 17: Expansion Projects (Continued)
Expansion Projects (Continued) LUBRICITY ADDITIVE PROJECTS Additive necessary in Low-Sulfur Diesel (not pipeline compatible) Southeast and Pacific Terminals Investment $4.3 million Expected annual EBITDA $2.5 million 5 units operational as of 12/31/2004 in Southeast/6 more by 2/1/05 13 add
Slide 18: Expansion Projects (Pipelines)
Expansion Projects (Pipelines) PACIFIC NORTH LINE Completed in December 2004 $95 million investment Increased capacity to Sacramento by 48 B/D or 32% − Additional expansions through horsepower New Route out of sensitive Suisun Marsh area Environmental permitting 35 months/Construction time
Slide 19: 2004 Acquisitions
2004 Acquisitions ExxonMobil Terminals Seven terminals $48 million purchase, additional $1.2 million to be invested Approximately 3.2 million Bbl storage 10 year term agreement with ExxonMobil All seven connected to Plantation Pipe Line, two connected to Colonial Pipe Line Charter Triad Te
Slide 20: KM Southeast Terminals
KM Southeast Terminals Kinder Morgan Terminal Locations Albany, GA Athens, GA Birmingham, AL (2) Charlotte, NC (3) Chesapeake, VA (2) (4) Collins, MS (3) Doraville, GA Greensboro, NC (2) (2) Knoxville, TN N. Augusta, SC (2) Newington, VA Richmond, VA (2) Roanoke, VA Selma, NC (4) Spartanburg, SC 20
Slide 21: 2004 Acquisitions
2004 Acquisitions RECAP OF KINDER MORGAN SOUTHEAST TERMINALS - TOTAL INVESTMENT $144 MILLION - 2004 DCF PERFORMANCE 18% OVER PLAN (EXCLUDES CTT ACQUISITION 11/04) - 2005 PLAN DCF OF $24,330 MILLION, 89% over 2004 DCF COCHIN PIPE LINE - 5% INTEREST FROM CONOCOPHILLIPS (FOR APPROXIMATELY $11M) - 49.8%
Slide 22: 2005 Products Pipeline Segment Overview
2005 Products Pipeline Segment Overview * CalNev West Coast 8% Terminals 8% SE Terminals Terminals 16% 5% CO2 Products Pacific Pipelines Pipelines 51% CFPL 28% 30% 6% Natural Gas Plantation 8% Pipelines 26% North System Cochin 6% 3% Transmix 5% * 2005 budgeted distributable cash flow before G&A and
Slide 23: 2005 Plan
2005 Plan Pipeline Volumes MMBBL Pipeline Revenues $MM 2005 2004 Pct 2005 2004 Pct Pacific 432.6 419.9 3.0% 343.4 319.2 7.6% Calnev 48.0 46.3 3.6% 57.0 54.6 4.3% Plantation 229.2 227.1 1.0% 174.3 166.0 5.0% Heartland 9.3 7.5 24.3% 8.4 7.0 20.0% CFPL 38.8 37.8 2.5% 38.2 36.5 4.5% Total 757.9 738.6 2.
Slide 24: 2005 Volume Forecast
2005 Volume Forecast Expect continued growth in gasoline and jet volumes in line with demographic trends Pacific / Calnev Expect 4% volume growth in Arizona and Las Vegas Ethanol effect has been fully absorbed in 2004; gasoline demand expected to increase by 3% in 2005 24
Slide 25: 2005 Volume Forecast (continued)
2005 Volume Forecast (continued) Plantation Expect 3.7% growth in Jet Fuel volumes. Continued growing demand at Atlanta, Charlotte, Dulles and Reagan. Length of haul will increase due to Colonial capacity issues during peak periods Central Florida Pipeline Expect 2.5% volume growth due to
Slide 26: SFPP Rate Case Update
SFPP Rate Case Update OR 92-8 Original case/FERC Opinion 435 (1999) – West Line Grandfathering upheld/East Line cost of service Court of Appeals Decision (July 2004) − Upheld FERC’s favorable grandfathering determination on West Line rates − Case remanded in November 2004 from Ct. of Appeals t
Slide 27: SFPP Rate Case Update (Continued)
SFPP Rate Case Update (Continued) OR 96-2 Global complaint case (Complaints first filed in 1995-1997/FERC delayed adjudication until 2000 -- after Opinion 435 in OR92-8) Phase I Commission decision (March 2004) affirmed ALJ finding of “changed circumstances” on West Line. Reversed ALJ finding
Slide 28: SFPP Rate Case Update (Continued)
SFPP Rate Case Update (Continued) NEW COMPLAINTS AIRLINES COMPLAINT (SEPTEMBER 2004); XOM/BP/COP COMPLAINTS (DECEMBER 2004) COMPLAINTS ATTACK ALL SFPP INTERSTATE RATES COMPLAINTS CONTEND “SUBSTANTIALLY CHANGED CIRCUMSTANCES” AND CONTINUED OVER-EARNINGS CASES LIKELY WILL BE CONSOLIDATED FOR H
Slide 29: SFPP Rate Case Update (Continued)
SFPP Rate Case Update (Continued) PL05-5 INCOME TAX ALLOWANCE INQUIRY BY FERC TRIGGERED BY COURT OF APPEALS REMAND OF OR92-8. RESPONSES DUE JANUARY 21. TRADE GROUPS (AOPL, EEI, INGAA), INVESTMENT COMMUNITY, PTP AND INDIVIDUAL COMPANIES SUPPORT FULL INCOME TAX ALLOWANCE AND IGNORING CORPORATE FOR
Slide 30: Safety
Safety Our objective year in/year out is Incident free operations. High profile incidents (Tucson, 2003; Suisun Marsh and Walnut Creek (2004)) KM performance vs. pipeline industry (reportable pipeline incidents per 1,000 miles of pipeline) 1998-2003 KM performance better than industry 5 of 6
Slide 31: Kinder Morgan
KINDER’ MORGAN